Article 28(3)(a) of the agreement as amended by the 1996 amending agreement provides that a United Kingdom-resident employee who is a member of a Danish pension scheme (including a personal pension scheme) and who continues to contribute to that scheme while working in the United Kingdom for his Danish employer or an associated employer, may, subject to certain conditions, qualify for tax relief in the United Kingdom in respect of his contributions to the Danish pension scheme. In these circumstances the employer’s contributions to the scheme are allowable in computing the employer’s profits in the United Kingdom (Article 28(3)(b)(ii)) and should not be treated as part of the employee’s taxable remuneration, for example as a benefit in kind (Article 28(3)(b)(i)).

To qualify for relief all of the following conditions must be met:

the individual must be employed in the United Kingdom by the employer who was his employer immediately before the individual began to exercise his employment in the United Kingdom or who is `associated’ with that employer. Employers are associated where one participates directly or indirectly in the management, control or capital of the other, or the same persons participate directly or indirectly in the management, control or capital of each of them;

the individual must have been a member of the Danish pension scheme immediately before becoming a resident of the United Kingdom;

the Danish scheme must be accepted by the United Kingdom authorities as corresponding to a pension scheme which is recognised for tax purposes by the United Kingdom. For this purpose, a scheme is recognised for tax purposes if an individual’s contributions to the scheme qualify for tax relief or payments made to the scheme by the employer are not deemed to be taxable income of the employee.

Different provisions applied prior to 1998/99. Advice can be sought if problems arise for these earlier years from CAR (Pension Scheme Services).

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